Here Comes the Judge (part 5):

“In 1984, war is peace; freedom is slavery; ignorance is strength... and (for Hollywood) defeat is victory!”

“Ladies and gentlemen, in the West Coast corner of the ring...from Hollywood, California, USA....wearing the red, white and blue trunks... Hollywood's 600-pound gorilla...producer of King Kong...Universal City Studios.”

“Yeah!”
“And in the Far East corner of the ring... from Tokyo, Japan...wearing the red and white trunks...known to many as the Japanese Godzilla...Sony Corporation.”

“Boo!”

It was now January of 1984, and Universal Studios and Sony were in the “15th round” of a “monster” legal battle that had lasted for over seven years.

With no early “knockouts” by either party, Sony Corp v. Universal City Studios, also known as the Betamax case, was finally, mercifully, going to be settled in this “final round,” by the nine “ringside” judges of the United States Supreme Court.

Both combatants had achieved one victory and suffered one defeat apiece, Sony prevailing in the US District Court for the Central District of California in 1979 (see part 3) and Universal getting that decision overturned, winning in the United States Court of Appeals for the Ninth Circuit in 1981 (see Part 4).

The “final round” of this epic struggle, which had started back in 1976 (see Part 1), began quite unceremoniously. On January 18, 1983, then Chief Justice Warren Burger declared, “Gentlemen, proceed whenever you are ready.” What he should have stated was, “Gentlemen, let’s get ready to rumble,” for this case would “go the distance.” It took precisely 364 days—one day short of a full year—to finally be settled once and for all.

By 1984, the home video business had entered a period of phenomenal growth in the US. There were approximately five million VCRs in the US, and the business generated from the VCR was estimated at $1.2 billion annually. Folks, 20 years ago, $1.2 billion was real money!

In his famous novel 1984, George Orwell predicted a scary world in which Big Brother was always watching, and reality was turned upside down and inside out. “War is peace; freedom is slavery; ignorance is strength,” was the mantra in Orwell's epic work.

In typical Orwellian tradition, in the real 1984, Sony's Betamax market share had fallen to only 12% and Hollywood was making tens of millions of dollars by resurrecting old movie titles that had been gathering dust in their movie vaults, and releasing them on home video. By 1984, the entire case had been turned upside down and inside out. Victory for Hollywood in 1984 might have meant defeat for their blossoming home video business. Victory meant defeat and defeat meant victory!

January 17, 1984 was a cold Tuesday afternoon. It was Super Bowl XVIII week and just a few days before the LA Raiders would play the Washington Redskins. (The Raiders would win that game 38–9, but it was best remembered for the “Big Brother” commercial that Apple ran, introducing the Macintosh.) (Click here to view commercial - Requires QuickTime).

I was the Video Product Manager for Maxell Corporation of America at the time (I later became the Marketing Manager), and at first had followed the case as an interested spectator who owned a VCR, but now, with responsibility for Maxell's Beta and VHS blank cassettes, I feared that if the Ninth Circuit decision favoring Universal was upheld by the Supreme Court, the home video market would be adversely affected. I recall my main concern was that a royalty “tax” might be imposed on every blank tape, the proceeds of which would be distributed to the studios for damages resulting from the use of VCRs illegally taping copyright material. For me, it was a “where were you standing" moment (the second floor of Maxell Corporation of America, 60 Oxford Drive, Moonachie, NJ… how's that!) when I heard the news that the US Supreme Court had reversed the Ninth Circuit Court's decision, and the legal battle between Sony and Universal Disney had finally, mercifully, come to an end.

In the 5–4 decision, the Supreme Court of the United States ruled in favor of Sony and concluded, “The sale of the VTRs [video tape recorders] to the general public does not constitute contributory infringement of respondents’ copyrights.” Justice John Paul Stevens wrote the majority opinion, with Justices Burger, Brennan, O'Connor, and White in agreement. Justice Harry Blackmun wrote the dissent opinion, with Justices Marshall, Powell, and Rehnquist also dissenting.

Again in Orwellian tradition, the case that had been fought for over seven years, decided by one vote in the Supreme Court—a case that would shape the entire home entertainment market and the emerging personal computer market—pivoted on the testimony of one man who was kind of a “big brother,” or perhaps kind of a “kind uncle.” The Supreme Court’s decision placed significant value on the testimony of Fred Rogers of “Mister Rogers’ Neighborhood,” who tipped the scales of justice when he blessed the VTR before the court . “Mister Rogers’ Neighborhood” was carried on public stations and reached over three million families a day, and he cared more about his audience than the amount of his earnings. “I’ve always thought of the neighborhood as a chance to have a ministry with families,” he declared to the court , “and I’ve been given a great gift. There are many compensations for what I do.”

Yes, on January 17, 1984, for Sony and for the rest of us as well, it was truly “a beautiful day in the neighborhood.”